Gusmao government ignores all criticism in Budget debate

FRENTE REVOLUCIONÁRIA DO TIMOR-LESTE INDEPENDENTE


FRETILIN


Media Release


Dili, 23 November 2009


During the three-day opening debate on the 2010 National Budget last week, de-facto Prime Minister Gusmao and his Finance Minister Emilia Pires failed to respond to formal requests from MPs for information on the ‘referendum’ infrastructure package, the Chinese-supplied electricity generators or the glaring irregularities in the 2009 Budget. Instead they praised themselves for exceptional economic management, and infuriated the Opposition and civil society critics.


The stage is set for a heated confrontation as the parliament moves into the detailed debate on the 66-page Budget this week.


FRETILIN MP and party vice president Arsenio Bano said, “They simply refused to answer the most important questions regarding the illegal, ill conceived and ill fated so called ‘referendum package’. They refused to deliver to the parliament during three days of debate the documents authorizing the alleged illegal payments from the Treasury to the business association AECCOP, which is headed by Mr Gusmao’s marriage Godfather, Mr Julio Alfaro.


“More than a year later they still have not delivered documents formally and legally requisitioned by FRETILIN MPs regarding the heavy fuel power plant project, which despite Mr Gusmao’s efforts to mislead the public, has clearly been cancelled. The Prime Minster himself has said that new generators will now be purchased, and a new design for the plant and equipment is being done. It will be more expensive according to all experts, yet we know nothing about the cost of cancelling the previous contract, nor what the new costs may be. This is clearly contempt for the parliament and blatant arrogance.”


In its recommendations, the all-party Economics, Finance and Anti-Corruption Committee, Committee C, recommended (number 20): “The Committee requests that during the general discussion of the draft law on State Budget for 2010, the Government provide to National Parliament the Prime Minister’s dispatch authorizing the transfer of funds for the referendum package and the Minister of Finance’s approval thereof.”


Mr Bano commented: “This request is important, because it involves the transfer of tens of millions of dollars - we have not been told how much - from the Treasury to a private association’s account, for payment of the so called ‘referendum package’ projects even before any works have been completed.  Committee C and many others have questioned the legality of this transfer. We cannot deliberate on the government’s assertions regarding last year’s budget implementation and the proposed implementation without having the necessary documents.  We are the national parliament, the representatives of the people. The government is an unelected executive appointed by the president.  The Constitution gives the parliament the powers to approve or reject the budget and to monitor and oversee the financial management of the country by the executive government. Yet we are faced with this arrogance and contempt.


“Mr Gusmao should be reminded that the days are over of him being the supreme commander of the struggle, where he used to give orders and his charges merely complied without question.  We are now a nation state, a constitutional democracy where the rule of law has primacy. The problem is that his own MPs, who rely on him for the seats they occupy, have neither the courage nor the independence to question him. They merely vote as he orders them, lest they lose their seats in an early election if he carries out his oft-repeated threat to resign,” Bano added.


Mr Bano also accused the government of misrepresenting its Budget execution rate, saying that in reality they have only just spent half of the moneys allocated last year, but continue to assert that they have spent up to 80% and more. “It’s not just FRETILIN or the other opposition parties who say the government needs to rethink its approach.  It’s the UNDP advisors who work with parliament. It is also what civil society is concerned about. Just look at what Lao Hamutuk said in its submission to committee C. Lao Hamutuk is the longest standing reconstruction NGO, and was very critical of FRETILIN also when we were in government,” said Mr Bano.


Lao Hamutuk was scathing of the government’s proposed budget for not investing in human development as well as for breaching the law.  It wrote:


“Like previous State budgets, this one focuses on improving the efficiency and capacity of government, rather than providing services to citizens who live outside of Dili. It highlights the need to increase ‘domestic revenues,’ rather than to expand the domestic economy. It does not prioritize sectors, which can directly improve the lives of most people– education, health and rural infrastructure.


“The Pakote Referendum is a textbook case of resource curse thinking, and we hope that Timor-Leste’s policy makers will not make similar mistakes again. If our local companies cannot compete without handouts of state money, how will they survive when the state has no dollars to give? If the projects local companies implement have no design, no accountability, no planning and three months to complete, how will they learn to build useful, long-lasting infrastructure?


“The draft 2010 State Budget does not mention the Pakote Referendum, even though it was underway more than a month before the Council of Ministers approved the budget on 7 October. This $70 million spontaneous project arose because the Ministry of Infrastructure couldn’t spend its 2009 Capital and Development budget on the heavy oil project. When Government arbitrarily shifted $70 million to unplanned activities, it disrespected the competency of Parliament to approve and oversee the budget. It also violated UNTAET Regulation 2001/13 by transferring more than 10% of an item without Parliamentary approval. The Decree-Law on this project, promulgated on 23 October but retroactive to 1 October, weakens processes of competitive tendering and omits the Request for Proposal and Terms of Reference which usually define a project. These projects must be implemented in less than three months, without any planning, so we expect that only the contractors will receive significant benefits.


“Nevertheless, we believe that the Pakote Referendum undermines Parliament’s authority, and hope that you will not allow future budgets to be ignored or manipulated in this way. In addition to opening up avenues for corruption, waste and poor quality, it prevents proper accountability and sustainability for public works infrastructure projects, which are definitely needed by our people.”


Mr Bano predicted that Mr Gusmao and his de facto ministers would deflect all criticism and continue to arrogantly blame the messengers: “We expect that they would say the Opposition is wrong. Their own MPs are wrong. UNDP are wrong. The Prime Minster even mocked the parliament’s own independent legal advisors. He is in the habit of mocking and accusing NGOs who stand up to him as being interfering foreigners, as he did during the last budget debate.


“He has even accused Timorese citizens who publicly raise allegations of corruption and bad governance by him and his de facto government as conspiring with international interests, mainly Australia, against him on the Sunrise oil and gas development. We can expect more of this when the heat is turned up against him in parliament this week,” Mr Bano closed.


END